If you follow any blogs on a regular basis, you probably are used to seeing links placed throughout the articles that lead to different products or online retailers. Chances are, the content producers are taking advantage of affiliate commissions from those retailers or product developers as a part of their revenue stream.
According to Wikipedia, affiliate marketing is "a type of performance-based marketing in which a business rewards one or more affiliates for each visitor or customer brought by the affiliate's own marketing efforts." Affiliate Marketing has become quite popular in recent years, and there are a lot of reasons to look into it if you are trying to market your product or services. Here are three main reasons you should include affiliate marketing in your overall marketing plan.
- Low start-up cost. An affiliate program completely depends on partnerships for developing content. Therefore, there is a very low start-up cost. You don't spend any money on advertising, but you will spend some time on research and vetting your potential affiliate connections. Since the benefit for the affiliate comes from a linked sale or purchase (commission-based), there usually isn't any upfront or ongoing cost for the marketer.
- Targeted traffic. Since you research and vet out all the potential affiliates, you can really hone in on the partnerships that will be most beneficial to your product or services. For example, if you are attempting to reach an audience for a kitchen gadget, you might target an online blog that focuses on home improvements or kitchen remodeling. That will ensure that you are reaching an established audience that is already focused on your target market.
- High return on investment (ROI). One of the main goals of all marketing efforts is to reach an audience that wants your products or services. So, with affiliate marketing, you are seeking out specific places that your audience visits, and therefore, you have a higher likelihood that you will receive more leads or sales. Because the investment in this type of marketing is so low and completely based on commission, you will automatically have a higher ROI than traditional advertising. For example, you are paying out 5% on sales made through affiliate connections; the risk is very low for the marketer because they don't end up paying
According to a study published in 2019, affiliate marketing spending in the U.S. is targeted to reach 8.2 billion U.S. dollars by 2022. So, it's not only a successful way of reaching your target audience - it can also be a lucrative one. If you aren't utilizing affiliate marketing, you may want to see if it works well for your particular product or service offering. If nothing else, you can easily reduce your customer acquisition costs with a meaningful affiliate marketing strategy.